Direct taxes were administered in the beginning by a small section inside the Ministry of Finance. Then, evolved into a directorate, and then, later on a
department.

The real expansion of taxation was in 1967. Tax offices spread throughout the various regions. The expansion in regional offices went on till 1984 when the
Chamber opened many tax offices at the provinces all over Sudan.

The Chamber of Taxation executes all the central government tax laws in connection with direct taxes which are:

- The Business Profit Tax imposed on individuals, companies and partnerships.

- Real Estate Income.

- Personal Income Tax (tax on wages and salaries).

- Stamp Duty (the state’s and the federal).

- National Contribution of Sudanese Working Abroad.

- Capital gains Tax.

In addition to execution of Value Added Tax, which was implemented in June 2000.

Legislative Evolution of Direct Taxes and Indirect Taxes in the Sudan:

Legislation had paved the way for establishment of what is nowadays known as the Sudan Chamber of Taxation. Here we are about to cite chronologically the
tax laws in light of which the Chamber started to evolve.

The levying of taxation in the Sudan began in 1901, when the Animal Royalties Ordinance came into effect. Followed by the National Spirit Beverages
Ordinance in 1907.

Imposition of taxes on business was effective, when Merchants Ordinance was passed in 1913. Accordingly, annual taxes levied on traders (individuals,
companies) subject to strata entered in the annexed schedule of the law. They were divided into ten rates. The schedule below shows how the legislation
evolved.

Year

The Law

1901

Animal Royalties Ordinance

1907

The National Spirit Beverages Ordinance

1913

The Merchants Tax Ordinance

1919

The Auction and Brokers Ordinance

1925

The Merchants Licenses Ordinance

1929

The Merchants Licenses and Business Profit Ordinance

1964

The Personal Income Tax Act

1965

Estate Income Act

1967

Income Tax Act

1986

Stamp Duty Act

1971

Income Tax Act

1986

Capital Gains Tax

1981

Sudanese Working Abroad Act

1984

Zakat and Taxation Act

1986

Income Tax Act

1993

Stamp Duty Act Amended

1993

Amendment of Sudanese Working Abroad Act

1994

Sales Tax repealed in 2000 when VAT entered into force

1995

Development Act repealed in 2001

1997

Defense Tax Act repealed in 1999

2000

VAT Act

The Present Situation of the Chamber of Taxation

The Chamber is executing the following laws:

1- Income Tax Act 1986; dealing with direct taxation of the business profit, wages and salaries and rental estates income. The Business Profit Tax rates
for individuals who work in the commercial sector are as following:

For residents and non-residents:

Income in Sudanese Pound

Rate

The first 3000

Exemption

Next 3000

5%

Next 4000

10%

Above that

15%

For the rental estates income:

Income in Sudanese Pound

Rate

The first 3000

Exemption

Above that

10%

For agriculture income, the rate is zero. Dividends are exempted from the B.PT. Interest rate is exempted at the level of individual, yet subject to B.P.T
at the level of companies.

For private and public shareholding companies, including, insurance companies, mining companies and money employment companies: 15% of the net income.

Industrial companies and individuals tax rate is 10% of the net profit, taking into account the prescribed threshold for the individuals.

The tax rate of oil and gas exploration, extraction, production and distribution companies and oil services companies( subcontractors) is 35% net income.
Tax rate for banking sector is 30%. Tobacco and cigarette companies 30%. For telecommunications companies the rate is 5% on the gross income.

As for the Wages and Salaries Tax; the below table shows the tax rate and the income strata for the residents and non-residents:

Total number of taxpayers that the Chamber deals with in BPT is around 140 000. VAT taxpayers number is around 24 000.

Total number of employees of STC is around 9000.

Other Developments

Introduction of the Withholding Tax in 2007. The rate is 1% on all public sectors purchases of goods, services and contraction (including rental estates)
with exception of oil products and exports.

Establishment of large taxpayers’ office, as a unified tax office in 2004, to deal with Business Profit Tax, Wages, and Salaries Tax, Value Added Tax and
Stamp Duty.

Also, an office for medium taxpayers has been set up in the following year. Later on three unified tax centers for small taxpayers were almost
simultaneously established. The aim of establishing these unified tax offices is to improve the service rendered to the taxpayers on one hand and to
ameliorate the tax administration in terms of cost-benefit analysis on the other hand. The plan is to continue opening these unified tax offices in all the
states of the country.

The Chamber started enforcing self-assessment process in 2008, to be applied on the top large 1000 companies only, as a first stage. Consequently, some
amendments have been introduced in the Income Tax Act of 1986, to match that new process.

Treatment of Non-resident Foreign Companies to the B.P.T:

The Minister of Finance has issued a ministerial order stating that “every person or area transacts with non-resident company having business in the Sudan, and has no exemption by the Investment Encouragement Act to deduct 7% from the due payment, as final withholding tax.”

· The VAT rate amended to be 17% according to a decision by the council of ministers .

· Communications companies exempted from BPT and Development Tax to be substituted by a tax on gross income ate 2.5 percent.

· Introduction of self-assessment system for all companies and large individual taxpayers only in this stage.

· As for the Base Erosion and Profit Shifting (BEPS) OECD Action Plan, We are in the stage of collecting data for starting the studies to come up with a
comprehensive views, matching with our particular situation and tax system, to address the Action Plan.

· We have sought technical support from the IMF and its Middle East Office, and World Bank, in addition to participating in its workshops and seminars, the
same with Association of Tax Authorities in Islamic Countries and OECD.

· Two main activities characterize 2014, the launching of the implementation of the two steps of computerization project, the first step accomplishment of
the document of business process reengineering. The second step started in the same year and will be completed in 2016, that is implementation of full
computerization of the tax core system. Preparations are also underway to launch the electronic invoice system, that is expected to bring about another
tremendous leap, in terms of broadening the tax base and, accordingly, increase exponentially the tax revenues, at the same not augmenting any tax burden
on the already perfectly compliant taxpayers.

V.A.T Exemptions

For Goods:

1- All the agricultural products that sold at their natural state.

2- Livestock, meat, poultry and its by-products, fishes, milk and its by-products.

3- Fertilities.

4- Seeds.

5- Insecticides and herbiticides.

6- Medicines and veterinary medicines.

7- Locally produced flour.

8- Bread.

9- Goods imported according to Immunities and Privileges Act.

10- Goods imported in line with agreements provide for exemptions.

For Services

1- Financial services. 2- Insurance Business.

3- Education services.

4- Medical services

5- Renting and sale of immovable properties for the purposes of private housing.

The Council of Ministers reserves the right to exempt any goods or services, and also preserves the right any exemption beyond a recommendation by the
Minister of Finance.

No goods or services shall be exemption save in pursuance of the V.A.T Act for 2001.